2007 (10) TMI 571 - HC - VAT and Sales Tax

Inter state v/s Intra state - whether goods had gone outside the State of U.P. and had not been sold inside the State of U.P.? - Held that - The order of the Tribunal as well as the order of the Assistant Commissioner (Judicial), Trade Tax, Jhansi, are not sustainable. Form F alone is not a sufficient document by which the presumption can be said to have been rebutted. Apart from form F, the party should file such evidences to show that the goods had reached the destination outside the State of U.P. and their further disposal. No such evidences have been filed. The appellate authority has accepted the form F without giving opportunity to the assessing authority as required under section 12B of the Act. The assessing authority could not get opportunity to examine the genuineness of form F. Appeal allowed. The matter is remanded back to the assessing authority to pass fresh order after giving proper opportunity of hearing.

Summary

Issues:
1. Validity of penalty imposed for failure to surrender transit pass.
2. Sufficiency of form F as evidence of goods going outside the State of U.P.
3. Applicability of rebuttable presumption under section 28B of the Act.

Analysis:
1. The judgment deals with a revision against an order imposing a penalty for not surrendering a transit pass at the exit check-post. The initial penalty was levied due to non-surrender of the transit pass, leading to an ex parte order. Subsequently, the matter was remanded back for fresh examination, but the opposite party did not appear, resulting in another penalty order. The assessing authority justified the penalty based on the failure to surrender the transit pass at the exit check-post, leading to the appeal process.

2. The appeal process involved the submission of form F by the opposite party to establish that the goods had exited the State of U.P. and were not sold within the state. The Assistant Commissioner (Judicial) and the Tribunal accepted form F as sufficient evidence to overturn the penalty. However, the validity of form F as the sole document to rebut the presumption under section 28B was contested by the learned Standing Counsel, emphasizing the need for additional evidence to prove the goods' destination and disposal outside the state.

3. The judgment highlighted the rebuttable presumption under section 28B of the Act, which assumes that goods have been sold within the State of U.P. if the transit pass obtained at the entry check-post is not surrendered at the exit check-post. The court emphasized that form F alone may not suffice to rebut this presumption and that additional evidence demonstrating the goods' journey outside the state is necessary. The order of the Tribunal and the first appellate authority were set aside, and the matter was remanded to the assessing authority for a fresh decision with proper opportunity for hearing and examination of evidence.

Overall, the judgment underscores the importance of providing substantial evidence beyond form F to rebut legal presumptions and the necessity for a thorough examination of all relevant documents and facts before imposing penalties or making legal determinations in taxation matters.